POCATELLO, Idaho (Reuters) – When Sean Luangrath moved to Inergy Solar, Pocatello, Idaho, a few years ago, the plan was to relocate the portable solar battery maker to his home base, Salt Lake City, so he could build it easier Access to the technical talents and venture capital of Silicon Slopes.
Sean Luangrath, CEO of Inergy Solar, is posing on November 1
However, when the new CEO examined labor costs, he gave up this plan and decided instead to trust the work of local colleges and the nearby Idaho National Laboratory. He plans to double the workforce to 50 by the next year as he moves production from China to eastern Idaho.
Laungrath says he likes being the relatively larger fish in a relatively smaller pool. "There is less competition for such things in this forest" (19659004). Luangrath's decision, however, also reflects the reality of a US labor market that has been the hottest in several decades.
The national unemployment rate remained stable at 3.7 percent last month, a 50-year low, as US Labor Department figures show Friday. And while employment growth fell short of expectations, at 155,000 in November, they were still twice as high as some estimates are needed to keep up with population growth.
In the twelve months to November, wages rose by 3.1 percent nationwide. This is shown by Friday's report, although this hides much faster growth in larger cities.
Four of the top 10 counties with the largest pay increases in the second quarter of 2018 were in the Greater San Francisco Bay Area, according to recent data from the US Labor Department.
And across the country, many labor markets are so tight that companies are slowing growth, according to data released by the Federal Reserve last week. For example, the Minneapolis Federal Reserve Bank reported that "the availability of labor is widely considered the biggest obstacle to short-term growth."
Scarce workers are driving up wages and "wage increases are expected to continue until 2019." said Andrew Chamberlain, chief economist on online jobs at Glassdoor, but said, "It's a very differentiated pay picture in the US . "
And this has created new opportunities for some companies that want to branch out.
Just over a year ago, the executives at the e-commerce firm Fivestars realized that they had a problem: the job market in San Francisco became too hot, and the customer support staff they needed for their next expansion were nowhere to be found
so they drove to El Paso, Texas.
By October, the online trading company in the frontier town had 65 Employees hired about a quarter of the total workforce.
The work there is not only cheaper, explains Matthew Curl, VP of Business Operations, it i However, it is easier to hire and retain employees. In San Francisco, he recently spent two months hiring just one client advisor who then broke out within a week to get a slightly better paid job.
El Paso is "everything we had hoped for: a stable labor market with experienced people who know what they are doing," he said.
El Paso's average weekly wage increased 2.4 percent to $ 733 in the second quarter of 2018 (US Department of Labor).
This equates to an increase of 4.4 percent in Salt Lake, an average weekly wage of $ 1,010 and a 9 percent increase in the Silicon Valley San Mateo, an average weekly wage of $ 2,357.
With such growth, more companies may try to solve their hot labor market problems by moving to a cooler place like the El Paso desert.
In fact, the trend may already be happening: Earlier this month, Curacubby, a Berkeley, California-based startup that automates school billing, announced it will open an office in El Paso in January.
Report by Ann Saphir; Edited by Dan Burns and Diane Craft